AGING AND DISABILITY SERVICES ADMINISTRATION

2006 NH "Dear Administrator" Letters

August 16, 2006

ADSA: NH #2006-019
I. Responsibilities of Representative Payee
II. Cable TV Expenses

Dear Nursing Facility/Home Administrator:

It has recently become apparent that a couple of subjects are causing some confusion for nursing facilities. We would like to address both:

1. Responsibilities of Representative Payee
   
   A nursing facility will frequently accept designation as the Representative Payee (Rep Payee) for a resident. However, a resident often receives benefits from more than one payer. While it will simplify matters for both the facility and the resident if the facility is Rep Payee for all payers, this is not always the case.
   
   Once a facility has been designated as the Rep Payee for a resident, it has the responsibility to ensure that the resident’s allowance for clothing, personal needs and incidentals (the CPI) is deposited intact to the resident’s trust account. Per WAC 388-96-372 (2), any allowance received from the Department, the Social Security Administration (SSA), or other payer must be deposited intact to the resident’s trust account within one week from its receipt.
   
   As Rep Payee, the facility must follow the provisions of the resident’s award letter, with recognition of the CPI taking precedence over payment of the resident’s required participation. Even if the award letter identifies other sources of income to the resident and the facility is not receiving those other sources, the CPI must be deposited from the funds the facility does receive from the Department or the SSA.
   
   Some examples may help clarify the facility’s responsibilities:
   1. The facility is appointed as the Rep Payee for both the SSA and the Department. Total funds
      received equal the CPI amount of $53.68 for a client who does not qualify for general assistance. These funds are to be deposited in the resident’s trust account within one week of receipt. The facility must bill the resident for any participation amounts owed per the award letter, if any.
   2. The facility is appointed as Rep Payee for the Supplemental Security Income (SSI) payment from the SSA ($30.00) but not for the Department’s portion of the CPI payment ($23.68). The check for $30.00 from the SSA must be deposited intact in the resident’s trust account. Since the facility does not receive the Department’s check for $23.68, it is not responsible for it. Instead, responsibility for that amount rests with the resident him- or herself if no Rep Payee has been appointed, or with the Rep Payee (usually, a relative of the resident) if one other than the facility has been appointed. If the facility is appointed Rep Payee for the Department but not for the SSA, the analysis would be the same but the amounts would be reversed.
   3. The facility is appointed Rep Payee and the SSA check, the Department check, and/or other income received exceeds the CPI amount. The CPI must be deposited intact into the resident’s trust account, and the remainder distributed by the facility per the instructions in the award letter.
   4. The facility is appointed Rep Payee for the SSA check, but not for a private pension check of the resident. The facility must deposit the CPI from the SSA check intact into the resident’s trust account, even if that means the facility does not receive enough money to cover the resident’s participation amount. It is the facility’s responsibility to bill the recipient of the pension check for the remainder of the resident’s participation.
   5. The facility is not appointed Rep Payee for the payments from either the SSA or the Department that make up the CPI. Rather, a relative of the resident is Rep Payee for both of these payments. Because the facility has not initially received the CPI, it is not initially responsible for it. However, if the resident’s relative who is the Rep Payee transmits the money to the facility, the facility must deposit the money intact into the resident’s trust account within one week of receipt.
   
   A resident’s designation of the facility as Rep Payee can simplify matters for both the resident and the facility. However, as Rep Payee the facility must remember that it has a fiduciary responsibility to the resident, and must recognize the primacy of the resident’s interest in any funds the facility receives in that capacity.
   
   
2. Cable TV Expenses
   
   In 2001, the Legislature changed the law regarding the cost of televisions for Medicaid residents. Previously, RCW 74.46.410 (2) had included in the list of unallowable costs:
   
   (t) Expenses related to telephones, televisions, radios, and similar appliances in patients’ private accommodations.
   
   The 2001 legislation removed the term “televisions” from subsection (2)(t), and added a new item in the list of unallowable costs:
   
   (u) Televisions acquired prior to July 1, 2001.
   
   With the 2001 amendment, the Legislature clearly indicated that televisions acquired on or after July 1, 2001 were considered allowable costs. However, since the new section did not mention “expenses related to” those televisions, it was less clear how expenses such as cable TV service fees should be treated.
   
   The Department accepts the argument that “basic cable” TV service is implicitly included in the cost of a television for a resident’s room. The television is an important source of entertainment for most residents. In some areas of the state reception of broadcast TV signals is so poor that it is not a practical alternative to cable. Basic cable packages generally include the three national television networks, plus a limited selection of news, sports, entertainment, and local access channels. It is reasonable that this programming content should be included in the cost of a television for a resident’s room.
   
   Therefore, the Department will recognize the service fees for a basic cable TV package as an allowable cost, if a facility chooses to provide basic cable TV service to all its residents within its daily rate and does not charge the residents for it. However, we emphasize that providing basic cable TV service is a choice, not a requirement. If the facility chooses, it can make the basic cable TV service optional to all its residents, and charge them for it. Obviously, if a facility charges its residents for the basic cable service, it may not claim the cost of the service as an allowable expense on the Medicaid cost report.
   
   The treatment of “expanded basic” or “premium” cable TV service is different. If a facility chooses, it may offer such expanded or premium packages to all its residents, and may further choose between providing them to all residents for free or to only those residents who wish to pay an additional fee for them. In either case, the Department will not recognize the cost of such expanded basic or premium packages as an allowable expense. While expanded basic or premium packages may well increase the enjoyment to be derived from a television, they are not so necessary to its enjoyment that Medicaid should pay their cost.

If you have any questions, please call the analyst responsible for your facility. If you do not know the name or phone number of your assigned analyst, please call Linda Herrera at (360) 725-2498.

Sincerely,

Bonnie M. Hawkins, Acting Chief
Office of Rates Management